Suppose the Government Believes Consumers Should Spend $1 Billion More

question 92

Multiple Choice

Suppose the government believes consumers should spend $1 billion more to get the economy out of a recession. The government wants to provide income to households by providing them with jobs and paying them directly. If the marginal propensity to consume is 0.8, the government should increase income by

• A) $0.2 billion.
• B) $0.25 billion.
• C) $0.8 billion.
• D) $1 billion.

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Definitions:

Network Adapter

A hardware component or software interface that connects a computer to a network, enabling communication with other computers and devices.

Network

A collection of interconnected computers, servers, and devices that share resources and data.

Airplane Mode

A setting on electronic devices that disables its wireless communication functions to prevent interference with aircraft operation and other equipment.

Wireless Communications

The transfer of information between two or more points without the use of electrical conductors or wires.